The coding of audio utilizes coding techniques that exploit various perceptual models of human hearing. For example, many weaker tones near strong ones are masked so they don't need to be coded. In traditional perceptual audio coding, this is exploited as adaptive quantization of different frequency data. Perceptually important frequency data are allocated more bits, and thus finer quantization and vice versa. See, e.g., Painter, T. and Spanias, A., “Perceptual Coding Of Digital Audio,” Proceedings Of The IEEE, vol. 88, Issue 4, April 2000, pp. 451-515.
Perceptual coding, however, can be taken to a broader sense. For example, some parts of the spectrum can be coded with appropriately shaped noise. See, Schulz, D., “Improving Audio Codecs By Noise Substitution,” Journal Of The AES, vol. 44, no. 7/8, July/August 1996, pp. 593-598. When taking this approach, the coded signal may not aim to render an exact or near exact version of the original. Rather the goal is to make it sound similar and pleasant when compared with the original.
All these perceptual effects can be used to reduce the bit-rate needed for coding of audio signals. This is because some frequency components do not need to be accurately represented as present in the original signal, but can be either not coded or replaced with something that gives the same perceptual effect as in the original.